Report: Medicare can save 8 billion U.S. dollars each year and improve hospital cost efficiency


If all hospitals are included in the medical insurance plan, Medicare can save $8 billion per year New Raun Institute Report Increased their cost and outcome indicators to match the best performers.

Lorne said that its report is the first to rank more than 3,000 hospitals based on cost efficiency, an indicator that combines results (measured by patient mortality) with their health insurance costs. The analysis of the health care think tank shows that even among hospitals of the same type, size, region, and similar mortality rate, there are large differences in costs. Among patients with an average 30-day mortality rate, medical insurance costs range from US$9,000 to US$27,000 per patient.

“It seems that if everyone can do their best, we will definitely save money and save lives,” said Dr. Vikas Saini, director of the Lorne Institute. “But for any hospital, it’s hard to say: this is the magic formula.”

To derive the score, Lown used the risk-standardized 30-day and 90-day mortality rates of Medicare patients hospitalized in the hospital between 2016 and 2018. For the cost, the researchers used 30-day and 90-day total risk standardized medical insurance payments for hospitalized patients. 2016 and 2018. Payments are standardized based on patient risk, so hospitals with severely ill patients will not be penalized.

Saini said that in order to combine these indicators into numbers, Lown placed them on a scatter chart and measured the distance of each hospital from the ideal score to create a score for each facility.

Not everyone agrees to use mortality as a single quality indicator. Michael Abrams, managing partner of Numerof & Associates, a healthcare consulting firm, said that this measure is too high to provide any useful information. He said that results like a heart attack would be more useful.

Abrams said: “There must be something not far from death, you would call it bad quality.” “It doesn’t go very far in explaining what quality of care is.”

Lorne chose death because it was “the hardest to argue about,” Saini said. The group will consider other indicators when expanding the scope of the study.

At the top of the list is Pinnacle Hospital in Crown Point, Indiana, a small hospital owned by 18-bed doctors. Its website promotes various specialties such as orthopedic services, plastic surgery, and internal medicine. Pinnacle did not respond to a request for comment.

St. Mary’s Regional Medical Center in Reno, Nevada, ranked second. Alan Smith, the hospital’s chief financial officer and chief operating officer, said he believes this is because the hospital places great emphasis on communication between clinical team members, support staff, community providers, and home care staff. There is a lot of coordination to ensure that patients receive test results and medications. If they are discharged to a professional nursing facility, the hospital staff will contact these providers to coordinate the transfer. He said that if they want to go home, they will contact the caregiver and make sure they understand their responsibilities.

“When the patient crosses our threshold, the focus on communication begins and doesn’t stop until they go home,” Smith said.

Smith said that he believes that the main drivers of death after discharge are inconvenience and high cost of medicine, which in some cases prevents patients from taking medicine on their own. Saint Mary’s helps fund a local non-profit organization that takes patients to a pharmacy, doctor appointment, or grocery store—wherever they need to go. The hospital has no plan to help patients afford the cost of medicines.

Saint Mary’s is part of Prime Healthcare, a chain of for-profit hospitals headquartered in Ontario, California. Many of its hospitals are ranked high in Lown’s cost efficiency rankings. Smith said he believes this is because Prime is led by doctors and encourages hospitals to share agreements that work well with each other.

Prime and its two doctors $37.5 million paid in July Resolve allegations of kickbacks involving implantable medical devices.That was after Prime and its CEO $65 million paid in 2018 To resolve the US Department of Justice lawsuit, the lawsuit accuses health care providers of pushing doctors to accept medical insurance beneficiaries as inpatients when they should be outpatients.

In third place is Mercy Medical Center in Dubuque, Iowa, followed by Encino Medical Center in Encino, California, which is another major hospital. AdventHealth Hendersonville, North Carolina, formerly known as Park Ridge Health, ranks fifth.

Ella Stenstrom, chief financial officer of AdventHealth Hendersonville, said in a statement that the hospital’s commitment to “holistic care” sets it apart. This means that staff are focused on meeting the physical, mental and spiritual needs of patients.

She said: “These patients let us know that they are grateful for this effort to focus on care and improve cost efficiency.”

Oroville Hospital in Oroville, California ranked sixth. Like St. Mary’s Hospital, Oroville’s CEO Robert Wentz said he believes that the key to hospital performance is communication. The staff closely follows each patient, including detailed analysis of the patient with the resident every morning.

Whenever a patient is about to be discharged from the hospital, the system will communicate with him so that not only the doctor but also the case manager, discharge planner and all other relevant personnel will be coordinated.

“If someone asks,’Why do you rank so high?’ If I can put it in one sentence, it’s communication,” Wentz said.

Saini does not know why the most efficient hospitals will eventually appear in small and medium-sized cities. He said that studies often show that the mortality and cost of subway hospitals are lower, while rural or suburban hospitals are the opposite. He is also not sure why there are several for-profit hospitals on the list of the most cost-effective hospitals, he guessed it might be because they have more patient throughput.

“People guess they might actually let them in and let them out,” Saini said. “It’s kind of like a restaurant. If you can have a higher turnover, you will do better.”

Lorne’s report also estimated how much medical insurance would save if lower-efficiency hospitals had the same cost per patient as their more efficient counterparts. This part of the study compared hospitals with similar mortality rates in the same city.

For example, in Boston, Auburn Hills Hospital costs $11,708 per patient for 30 days. The cost per patient at Brigham and Women’s Hospital is US$14,567. Lown estimates that if Brigham and Women’s were as efficient as Mount Auburn, Medicare would save $33.4 million a year.

In Chicago, Advocate Illinois Mason Medical Center costs $12,913 per patient for 30 days, while Rush University Medical Center costs $16,372. The study shows that this represents an annual saving of US$27.5 million.

Since Medicare pays standardized rates, Lown’s cost indicators do not reflect changes in prices, but changes in the amount of services provided to patients. It includes all providers involved in patient care, including skilled nursing staff or home care providers.

Saini said the hypothesis is that if the hospital or the community better coordinate care throughout the patient’s onset, the hospital will perform better in terms of cost efficiency. Cost data does not include business bills, but he said that if a hospital’s medical insurance billing practices reflect its broader style or culture, it should also flow to business.

“When clinicians consider this, there may be many ways to improve care—including quality and cost—that require concentration,” Saini said. “Then the innovation and creativity of the clinical community, when it is Bringing to bears can actually produce a lot of interesting and good results.”



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